The Mortgage Bankers Association (MBA) announced today that mortgage applications for buying a home rose last week to the highest levels since the end of the Obama Administrations homebuyer tax credit program in April.

The MBA’s seasonally adjusted Purchase Index rose 9.3 percent, hitting its highest level since the week ending May 7, immediately following the end of the tax credit. Purchase applications have been struggling back in recent weeks after plummeting following the end of the program and up an average of 2.0 percent a week over the past four weeks.

The MBA reported that the rise was driven by a 17.2 percent increase in applications for FHA mortgages, compared to a 3.6 percent increase in applications for conventional mortgages. Jay Brinkmann, MBA chief economists, said the boost may have been due to homebuyers seeking to get their applications in before new guidelines for FHA loans took effect Oct. 4.

Those guidelines included raising the annual insurance premium on FHA mortgages to 0.9 percent of the loan, up from 0.55 percent previously. The up-front premium charged for FHA loans decreased to 1 percent from 2.55 percent previously, although this savings would be cancelled out by the higher insurance fees after about five years.

Unfortunately, overall mortgage applications actually declined last week, driven by a 2.5 percent decline in refinance activity, which makes up about four-fifths of all mortgage applications. The decline occurred despite a big drop in interest rates for 30-year fixed rate mortgages, which fell to an average 4.25 percent, the lowest on record, down from 4.38 percent in the previous week’s MBA survey.

Refinance applications have been steadily declining in recent weeks despite falling interest rates, falling an average of 4.2 percent a week over the past month.

The Mortgage Bankers Association (MBA) announced today that mortgage applications for buying a home rose last week to the highest levels since the end of the Obama Administrations homebuyer tax credit program in April.

The MBA’s seasonally adjusted Purchase Index rose 9.3 percent, hitting its highest level since the week ending May 7, immediately following the end of the tax credit. Purchase applications have been struggling back in recent weeks after plummeting following the end of the program and up an average of 2.0 percent a week over the past four weeks.

The MBA reported that the rise was driven by a 17.2 percent increase in applications for FHA mortgages, compared to a 3.6 percent increase in applications for conventional mortgages. Jay Brinkmann, MBA chief economists, said the boost may have been due to homebuyers seeking to get their applications in before new guidelines for FHA loans took effect Oct. 4.

Those guidelines included raising the annual insurance premium on FHA mortgages to 0.9 percent of the loan, up from 0.55 percent previously. The up-front premium charged for FHA loans decreased to 1 percent from 2.55 percent previously, although this savings would be cancelled out by the higher insurance fees after about five years.

Unfortunately, overall mortgage applications actually declined last week, driven by a 2.5 percent decline in refinance activity, which makes up about four-fifths of all mortgage applications. The decline occurred despite a big drop in interest rates for 30-year fixed rate mortgages, which fell to an average 4.25 percent, the lowest on record, down from 4.38 percent in the previous week’s MBA survey.

Refinance applications have been steadily declining in recent weeks despite falling interest rates, falling an average of 4.2 percent a week over the past month.

The Mortgage Bankers Association (MBA) announced today that mortgage applications for buying a home rose last week to the highest levels since the end of the Obama Administrations homebuyer tax credit program in April.

The MBA’s seasonally adjusted Purchase Index rose 9.3 percent, hitting its highest level since the week ending May 7, immediately following the end of the tax credit. Purchase applications have been struggling back in recent weeks after plummeting following the end of the program and up an average of 2.0 percent a week over the past four weeks.

The MBA reported that the rise was driven by a 17.2 percent increase in applications for FHA mortgages, compared to a 3.6 percent increase in applications for conventional mortgages. Jay Brinkmann, MBA chief economists, said the boost may have been due to homebuyers seeking to get their applications in before new guidelines for FHA loans took effect Oct. 4.

Those guidelines included raising the annual insurance premium on FHA mortgages to 0.9 percent of the loan, up from 0.55 percent previously. The up-front premium charged for FHA loans decreased to 1 percent from 2.55 percent previously, although this savings would be cancelled out by the higher insurance fees after about five years.

Unfortunately, overall mortgage applications actually declined last week, driven by a 2.5 percent decline in refinance activity, which makes up about four-fifths of all mortgage applications. The decline occurred despite a big drop in interest rates for 30-year fixed rate mortgages, which fell to an average 4.25 percent, the lowest on record, down from 4.38 percent in the previous week’s MBA survey.

Refinance applications have been steadily declining in recent weeks despite falling interest rates, falling an average of 4.2 percent a week over the past month.